Insurance Law

Coverage for Residents Who Don't Primarily Reside in a Household

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Household

On May 1, 1984, 15-year-old Lynda Sue Frazier was killed in a high-speed chase with police while riding with friend and classmate Herbert J. Houston in a vehicle that, unbeknownst to her or her mother, was stolen. The vehicle had no insurance coverage, and her mother's policy excluded coverage for vehicles used without the owner's permission. However, because of a well-settled principle of law observed by many states around the country, her parents were able to recover under her father's uninsured motorist policy.

Perhaps in response to this well-settled principle, insurance carriers have developed new policy language that has yet to be litigated in Pennsylvania courts. However, if the growing litigation around the country is any indication, when this new language inevitably hits the Pennsylvania courts, recovery in cases like this will no longer be available.

'Resident of the Household'

At the time of her death, Frazier's parents were divorced. She lived with her mother most of the time but spent some nights at her father's house, kept some possessions there and was claimed by her father on his taxes. As it turned out, her father's uninsured motorist coverage contained typical language defining the word "insured" to include himself, plus any "family member." The policy further defined "family member" as "a person related to you by blood, marriage or adoption who is a resident of your household, including a ward or foster child."

Thus, in Nationwide Insurance v. Frazier, 39 Pa. D. & C.3d 254 (1986), the Mercer County Court of Common Pleas held that even though Frazier's mother had custody of her and Frazier lived with her mother for most of the year, she had sufficient enough connections to her father's household to also be considered a resident of his household, and therefore an insured, under his policy.

In the years since Frazier, the Pennsylvania Superior Court in Erie Insurance Exchange v. Weryha, 2007 Pa. Super. 247, 931 A.2d 739, 742 (2007), and Amica Mutual Insurance v. Donegal Mutual Insurance, 376 Pa. Super. 109, 545 A.2d 343 (1988), has confirmed the relatively straightforward and well-accepted principle that "a child of separated or divorced parents may be regarded as a resident of the household of both parents."

'Resides Primarily' in the Household

Undoubtedly in response to this principle, some carriers have eschewed the language found in Frazier, at least in the context of uninsured and underinsured motorist coverage. In its place, these carriers have adopted language providing coverage for a relative who "resides primarily" with the named insured on an insurance policy. This language first defines an "insured" as "(1) the first person named in the declarations; (2) his or her spouse, and (3) their relatives." Then, it defines a "relative" as "a person related to you or your spouse by blood, marriage or adoption who resides primarily with you."

The result, in the states that have considered this language, has been the end of the practice of allowing people, such as children of divorced parents, to be covered under more than one such policy.

Mounting Litigation

In one of the earliest published opinions involving the "resides primarily" language, the Court of Civil Appeals of Alabama in B.D.B. v. State Farm Mutual Automobile Insurance, 814 So. 2d 877, 881 (Ala. Civ. App. 2001), considered the language and had no problem distinguishing it from the "resident relative" language, opining that, "We do not disagree with the proposition that a child of separated or divorced parents may be regarded as a resident of the household of both parents, and, if this policy had different language, then we might reach a very different result here. The language in this policy, however, is clear and unambiguous. ... The fact that B.D.B. kept personal items at her father's house and spent two Saturdays a month with him does not compel the conclusion that she lived primarily with him."

Two years later, in State Farm Mutual Automobile Insurance v. Harris, 882 So. 2d 849, 854 (Ala. 2003), in consideration of the same language, the Alabama Supreme Court acknowledged that while a person may have more than one household, "we fail to see how a person may 'primarily' or 'for the most part' live in more than one place at one time."

This litigation subsequently began to appear in other states, but with the same result. In State Farm Mutual Automobile Insurance v. Colon, 880 So. 2d 782, 783 (Fla. Dist. Ct. App. 2004), a claimant was in an automobile accident while temporarily living with her grandfather while she waited for her own water-damaged house to be repaired. While there, she continued to maintain the mortgage, utilities, phone and mail service at her own house. She also had a clear intent to move back to her house when the repairs were complete. The court found that although the claimant was not living in her home at the time of her car accident, she never abandoned the home as her primary residence, and she could not claim to have a second primary residence under the grandfather's policy.

As with Frazier, in Haydel v. State Farm Mutual Automobile Insurance, 935 So. 2d 171, 174 (La. App. 1st Cir. 2006), a 15-year-old was killed while riding as a passenger in a vehicle driven by his friend. His father sought recovery under his own underinsured motorist policy containing the "primarily resides" language. The decedent's father agreed that the decedent resided with his mother for "most" of the school year, and that he spent about "70 percent" of his time in his mother's household, but argued that the decedent had more than one residence. The court also found that while the decedent had more than one residence, there could be only one primary residence.

In Bauer v. USAA Casualty Insurance, 295 Wis. 2d 481, 487, 720 N.W.2d 187, 190 (2006), the Wisconsin Court of Appeals followed Alabama's lead, observing that "to have a 'primary' residence under this commonly accepted definition means there can only be one primary residence." Likewise, in State Farm Mutual Automobile Insurance v. Fultz, C.A. No. 2:06-cv-0015 (N.D.W.V. September 24, 2007), the court considered the "resides primarily" language and made the satisfyingly unambiguous declaration that even though it is certainly possible for someone to have two residences, "an individual cannot primarily reside at more than one residence."

In Wallace v. State Farm Mutual Automobile Insurance, 2007 Ohio 6373, No. F-07-012 (Ohio Ct. App. Nov. 30, 2007), the Ohio Court of Appeals turned to the Black's Law Dictionary, which defines primary as "first; principal; chief; leading," before concluding that, "clearly, the essence of the meaning indicated by the term 'primary' is that it is indicative of singular, not multiple, application."

In Hall v. Shelter Mutual Insurance, 45 Kan. App. 2d 797, 802, 253 P.3d 377, 381 (2011), the Kansas Court of Appeals, like the other courts before it, had no trouble with the distinction between the old language and the new language, stating "the purpose of ... excluding coverage to a child not primarily residing with a parent is readily apparent in this case. ... Hall may have established that Kinnie maintained residency in both households, but the evidence is undisputed regarding her primary residence."

And in State Farm Fire and Casualty v. Lange, 480 Fed. Appx. 309, 314 (5th Cir. 2012), the "resides primarily" language made an appearance in a federal court of appeals. There, the U.S. Court of Appeals for the Fifth Circuit found the term "primary residence" to be unambiguous, holding that under Texas law, the fact that a driver kept important possessions in his parents' home and stayed there on occasional weekends was not enough to make his parents' home his primary residence. He had moved out of their home almost four years before the accident, worked full-time and lived in an apartment 45 miles away.

Conclusion

When litigation regarding coverage on uninsured and underinsured motorist policies containing the "resides primarily" language inevitably arrives in Pennsylvania, the growing body of litigation around the country provides ample support for the conclusion that this language will not allow a person, including the minor child of divorced parents, to argue that he or she "resides primarily" in more than one household, or with more than one parent.

This means that in cases like that of Frazier, the grieving parents of a deceased child would simply be out of luck.

Asher Brooks Chancey is an attorney at the Nicolson Law Group. He focuses his practice on products liability, commercial transportation and civil litigation.

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